Chilean salmon eating away at Norway’s market share in the East

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World production of salmon is expected to pass 2.5 million tonnes this year for the first time.

The salmon market grew by six per cent in 2018, more specifically by 142,000 tonnes. But some markets grew even faster. Among them were emerging markets China, Vietnam, South Korea and Taiwan who grew by ten per-cent.

These markets have previously been completely dominated by Norwegian suppliers, with airborne fresh salmon, but in recent years there has been a radical shift in market shares in favour of Chile. Norway is still the largest supplier here, while Chile is now hot on its heels.

Prefer large salmon
There are several reasons for this.

Of course, the change in market share is a function of Norway’s exclusion from the Chinese market following the award of the Nobel Peace Prize to dissident Liu Xiaobo in 2010.

“At the same time, Chileans have produced larger harvesting fish, while Norway’s average harvest weight has fallen slightly,” said Kontal CEO Ragnar Nystøyl in a post during this year’s North Atlantic Seafood Conference in Bergen.

The Far East markets prefer large salmon, with large fillets.

2.5 million tonnes
Globally, the analysis company expects salmon production to round up to 2.5 million tonnes this year. The joker on the supply side is whether the Chilean harvest weight will still remain high.

“Our base case scenario is a five per-cent growth in the offering this year,” said Nystøyl.

The largest producer of farmed salmon is still Norway, with just over 1.3 million tonnes, while Chile is number two with just under 700,000 tonnes.

Faster than supply
Demand, however, believes Nystøyl and Kontali will grow even faster than the supply – which, all else being equal, will imply increased underlying prices.

“The market expects us to grow by six to seven per-cent,” he said.